The United Arab Emirates (UAE):
Issues for U.S. Policy

Kenneth Katzman
Specialist in Middle Eastern Affairs
July 17, 2012
Congressional Research Service
7-5700
www.crs.gov
RS21852
CRS Report for Congress
Pr
epared for Members and Committees of Congress

The United Arab Emirates (UAE): Issues for U.S. Policy

Summary
The UAE’s relatively open borders and economy have won praise from advocates of expanded
freedoms in the Middle East while producing financial excesses, social ills such as human
trafficking, as well as opportunity for both illicit and legitimate Iranian businesses to operate
there. Moreover, the social and economic freedoms have not translated into significant political
opening; the UAE government remains under the control of a small circle of leaders, even as it
allows informal citizen participation and traditional consensus-building. Members of the elite (the
ruling families of the seven emirates and clans allied with them) also routinely obtain favored
treatment in court cases and lucrative business opportunities. However, economic wealth—
coupled with some government moves against political activists—have enabled the UAE to avoid
wide-scale popular unrest that have erupted elsewhere in the Middle East since early 2011.
Political reform has been limited, both before and since the Arab uprisings began in the region.
Lacking popular pressure for elections, the UAE long refrained from following other Gulf states’
institution of electoral processes. It altered that position in December 2006 when it instituted a
selection process for half the membership of its consultative body, the Federal National Council
(FNC). Possibly to try to ward off the unrest sweeping the region, the government significantly
expanded the electorate for the September 24, 2011, FNC election process. However, turnout was
only about 25%, suggesting that the clamor for democracy in UAE remains limited or that the
citizenry perceived the election as unlikely to produce change. And, the government has not
announced a major expansion of the FNC’s powers, which many intellectuals and activists seek.
On foreign policy issues, the UAE—along with fellow Gulf state Qatar—has become
increasingly and uncharacteristically assertive in recent years. This assertiveness is probably a
product of the UAE’s ample financial resources and its drive to promote regional stability. The
UAE has joined the United States and U.S. allies in backing and then implementing most
international sanctions against Iran, causing friction with its powerful northern neighbor. It has
deployed troops to Afghanistan since 2003. In 2011, it sent police to help the beleaguered
government of fellow Gulf Cooperation Council (GCC) state Bahrain, supported operations
against Muammar Qadhafi of Libya, joined a successful GCC diplomatic effort to broker a
political solution to the unrest in Yemen, backed the Arab League suspension of Syria, and
appointed an Ambassador to NATO. It gives large amounts of international humanitarian and
development aid, for example for relief efforts in Somalia. The UAE’s growing assertiveness on
foreign policy marks its emergence from the 2008-2010 global financial crisis and recession. That
downturn hit Dubai emirate particularly hard and called into question its strategy of rapid,
investment-fueled development, especially of luxury projects.
For the Obama Administration and many in Congress, there were early concerns about the UAE
oversight and management of a complex and technically advanced initiative such as a nuclear
power program. This was underscored by dissatisfaction among some Members of Congress with
a U.S.-UAE civilian nuclear cooperation agreement. The agreement was signed on May 21, 2009,
submitted to Congress that day, and entered into force on December 17, 2009. However, concerns
about potential leakage of U.S. and other advanced technologies through the UAE to Iran, in
particular, have been largely alleviated by the UAE’s development of strict controls, capable
management, and cooperation with international oversight of its nuclear program.

Congressional Research Service

The United Arab Emirates (UAE): Issues for U.S. Policy

Contents
Governance, Human Rights, and Reform........................................................................................ 1
Political Opposition, Reforms, and 2011-12 Regional Unrest .................................................. 3
Arab Uprisings Increase Focus on September 24, 2011, FNC Election.............................. 4
But, Substantial Political Unrest Avoided To Date.............................................................. 5
U.S. Democracy Promotion Efforts/NDI Closing............................................................... 6
General Human Rights-Related Issues ...................................................................................... 6
Press and Research Institute Freedoms ............................................................................... 7
Justice/Rule of Law............................................................................................................. 7
Women’s Rights .................................................................................................................. 7
Religious Freedom .............................................................................................................. 8
Labor Rights........................................................................................................................ 8
Human Trafficking .............................................................................................................. 8
Cooperation Against Terrorism and Proliferation............................................................................ 9
Terrorism Issues......................................................................................................................... 9
Port and Border Controls........................................................................................................... 9
Export Controls ....................................................................................................................... 10
Nuclear Agreement............................................................................................................ 11
Foreign Policy and Defense........................................................................................................... 12
Regional Security Cooperation With the United States........................................................... 12
U.S. and Other Arms Sales................................................................................................ 13
Defense Relations with Other Nations and Alliances ....................................................... 15
Other Cooperation on Iran................................................................................................. 15
Cooperation on Iraq........................................................................................................... 17
Cooperation on Afghanistan and Pakistan......................................................................... 17
Other Regional Issues: Response to 2011 Unrest in the Middle East...................................... 18
Other Regional Issues: Arab-Israeli Dispute..................................................................... 19
Border Issues..................................................................................................................... 20
UAE Provision of Foreign Aid.......................................................................................... 20
Economic Issues ............................................................................................................................ 20
Oil and Gas Sector/Dedication to Future Clean Energy.................................................... 21
U.S.-UAE Free Trade Agreement Negotiations ................................................................ 22

Figures
Figure 1. Map of United Arab Emirates........................................................................................... 3

Tables
Table 1. Some Basic Facts About UAE ........................................................................................... 2
Table 2. Recent U.S. Aid to UAE .................................................................................................. 22

Congressional Research Service

The United Arab Emirates (UAE): Issues for U.S. Policy

Contacts
Author Contact Information........................................................................................................... 23

Congressional Research Service

The United Arab Emirates (UAE): Issues for U.S. Policy

Governance, Human Rights, and Reform1
The United Arab Emirates (UAE) is a federation of seven emirates (principalities): Abu Dhabi,
the oil-rich capital of the federation; Dubai, its free-trading commercial hub; and the five smaller
and less wealthy emirates of Sharjah, Ajman, Fujayrah, Umm al-Qaywayn, and Ras al-Khaymah.
After Britain announced in 1968 that it would no longer ensure security in the Gulf, six “Trucial
States” decided to form the UAE federation in December 1971; Ras al-Khaymah joined in 1972.
The UAE federation has completed a major leadership transition since the death of its key
founder, Shaykh Zayid bin Sultan Al Nuhayyan, long-time ruler of Abu Dhabi and UAE
president, on November 2, 2004.
Shaykh Zayid’s son, Shaykh Khalifa bin Zayid al-Nuhayyan, born in 1948, was at that time
Crown Prince and was named ruler of Abu Dhabi upon Zayid’s death. In keeping with tradition,
although not formal law, Khalifa was subsequently selected by all seven emirates (Federal
Supreme Council) as UAE president. The third son of Zayid, Shaykh Mohammad bin Zayid al-
Nuhayyan, is Abu Dhabi crown prince and heir apparent. The ruler of Dubai traditionally serves
concurrently as vice president and prime minister of the UAE; that position has been held by
Shaykh Mohammad bin Rashid Al Maktum, architect of Dubai’s modernization drive, since the
death of his elder brother Shaykh Maktum bin Rashid Al Maktum on January 5, 2006. Shaykh
Mohammad bin Rashid also continued as defense minister. The crown prince of Dubai is his son,
Hamdan bin Mohammad Al Maktum, who heads the “Dubai Executive Committee,” the
equivalent of a cabinet for Dubai emirate. Under a Dubai-level reorganization announced in
January 2010, five committees were set up to help the Executive Committee on various major
issues.
The federation president and vice president serve five-year terms, but they technically owe their
positions to the UAE’s highest body, the Federal Supreme Council, which is composed of the
leaders of each of the seven emirates of the UAE. Two emirates, Sharjah and Ras al-Khaymah,
have a common ruling family: the Al Qawasim tribe. At the latest review of senior leadership
posts, on November 3, 2009, it decided that Shaykh Khalifa and Shaykh Mohammad would serve
another five-year term as Presidential and Prime Minister, respectively. The review was mostly a
formality; in practice, the leadership posts change only in the event of death of an incumbent. The
Federal Supreme Council meets four times per year to establish general policy guidelines,
although the leaders of the seven emirates consult frequently with each other.
A UAE cabinet reshuffle in May 2009 strengthened the hand of Abu Dhabi Crown Prince
Mohammad bin Zayid because the deputy prime ministers appointed then are close to him.
However, there are no evident rifts between him and his brother, UAE President Khalifa.


1 Information in this section is from the following State Department reports: Country Reports on Human Rights
Practices-2011 (May 24, 2012); Trafficking in Persons Report for 2012 (June 19, 2012); and International Religious
Freedom report for July-December 2010 (September 13, 2011).
Congressional Research Service
1

The United Arab Emirates (UAE): Issues for U.S. Policy

Table 1. Some Basic Facts About UAE
Population
8.5 million, of which about 1 million (about 12%) are
citizens.
Religions
96% Muslim, of which 16% are Shiite; 4% Christian and
Hindu
Ethnic Groups
19% Emirati (citizenry); 23% other Arab and Iranian; 50%
South Asian; 8% Western and other Asian expatriate
Size of Armed Forces
About 50,000
Inflation Rate (2011)
About 2.5%
GDP Growth Rate for 2011
3.3%
GDP (purchasing power parity, ppp, 2011)
$261 billion. Per capita is $48,500 ppp
Oil Exports
About 2.7 million barrels per day
Foreign Exchange and Gold Reserves
About $67 billion, but some estimates of the value of its
sovereign wealth fund investments run into the several
hundreds of bllions of dollars.
U.S. Exports to the UAE (2011)
$15.9 billion, making UAE the largest U.S. export market
in the Arab world. Goods sold to UAE are mostly
machinery, aircraft, industrial materials, and other high
value items.
Imports from UAE by the United States (2011)
$2.44 billion. About 10% of that amount half of the total
was crude oil, but about 30% was aluminum. Other
major categories include clothing and diamonds.
U.S. citizens resident in UAE
About 40,000
Major Projects
Dubai inaugurated 2,000+ foot “Burj Khalifa,” world’s
tal est building, on January 4, 2010. Dubai metro has
begun operations and is expanding service. Burj al Arab
hotel in Dubai bills itself as “world’s only 7-star hotel.”
UAE participating in Gulf country-wide railroad network
to become operational by 2017. Abu Dhabi has built local
branches of Guggenheim and Louvre museums.
Sources: CIA, The World Factbook; U.S. Census Bureau, Foreign Trade Statistics.
The leaders of the other individual emirates are Dr. Sultan bin Muhammad Al Qassimi (Sharjah);
Saud bin Saqr Al Qassimi, (Ras al-Khaymah, see below); Humaid bin Rashid Al Nuaimi
(Ajman); Hamad bin Muhammad Al Sharqi (Fujayrah); and Saud bin Rashid Al-Mu’alla (Umm
al-Qaywayn). Shaykh Saud of Umm al-Qaywayn, who is about 60 years old, was named leader of
that emirate in January 2009 upon the death of his father, Shaykh Rashid Al-Mu’alla.
In Ras al-Khaymah, there was a brief leadership struggle upon the October 27, 2010, death of the
ailing longtime ruler, Shaykh Saqr bin Mohammad Al Qassim. He was succeeded by Shaykh
Saud bin Saqr, who was the crown prince since 2003 when the ruler replaced Saud’s elder
brother, Shaykh Khalid bin Saqr, as crown prince. During 2003-2010, often using public relations
campaigns in the United States and elsewhere, Shaykh Khalid had claimed to remain as crown
prince even though the UAE federal government had repeatedly stated that his removal was
legitimate and that he held no official position in the UAE. Shaykh Khalid’s home in Ras al-
Khaymah was surrounded by security forces the night his father died, enforcing the rulership
rights of Shaykh Saud.
Congressional Research Service
2


The United Arab Emirates (UAE): Issues for U.S. Policy

Figure 1. Map of United Arab Emirates

Source: CRS Graphics.
Political Opposition, Reforms, and 2011-12 Regional Unrest
The UAE is not considered by any outside organization to be a democracy, but its perceived
social openness and tolerance, coupled with ample wealth, have rendered the overwhelming bulk
of the population apparently satisfied with the political system. Prior to an upsurge of youth and
intellectual-led activism inspired by the Arab uprisings of 2011, there had been little, if any, signs
of opposition to the UAE rulers. UAE residents of Iranian origin tend to oppose the UAE
government’s criticisms of Iran, but this community does not constitute an organized opposition.
A long-term potential source of opposition, the Islamist movements in the UAE, including those
linked to the Muslim Brotherhood, have been generally non-violent and limited their activities to
social and relief work. However, perceiving that Islamist movements have become more active
since 2011, the government has arrested at least eight members of an Brotherhood affiliated
Islamist group, Islah (Reform) since the beginning of 2012. One is Dr. Sultan al-Qasimi, a
member of the royal family of Ras al-Khaymah. Five others are missing and suspected of being in
custody.
UAE leaders have argued that Western-style democracy, including elections for the country’s
leadership, is not needed in UAE because Emiratis are able to express their concerns directly to
the leadership through traditional consultative mechanisms. Most prominent among these
channels is the open majlis (councils) held by many UAE leaders, including Shaykh Khalifa.
Congressional Research Service
3

The United Arab Emirates (UAE): Issues for U.S. Policy

UAE leaders long argued that any elections, even those for a legislature or other representative
body, would inevitably aggravate long dormant schisms among tribes and clans and potentially
cause Islamist factions to become more radical. Partly for that reason, political parties are
prohibited. In addition, authorities generally disperse protests and public gatherings that are
political in nature, unless such gatherings align with government policies.
This view in the leadership prevailed until 2006, even as electoral processes began to expand in
the other Gulf states. Despite the absence of public agitation for major political opening, the UAE
leadership decided it had fallen too far behind its Gulf neighbors and, in December 2006, it
instituted a limited and controlled electoral process for half of the 40-seat Federal National
Council (FNC). The other 20 seats would still be appointed. Previously, all 40 members of the
FNC were appointed by all seven emirates. The seat distribution of the FNC remains weighted in
favor of Abu Dhabi and Dubai (eight seats each). Sharjah and Ras al-Khaymah have six each, and
the others have four seats each.
The electorate was to be limited to a “local council,” convened by the rulers of each emirate,
numbering 100 persons per FNC seat. So, for example, the Abu Dhabi electoral council would be
100 x 8 = 800 electors, and the total UAE-wide electorate would be 4,000 persons. However, the
Election Commission approved a slightly larger 6,595-person electorate, or about 160 persons per
FNC seat. Of this total, 1,162 electors were women (less than 20%). Out of the total of 452
candidates for the 20 FNC elected seats, there were 65 female candidates. Only one woman was
elected (from Abu Dhabi), but another seven women were appointed to the remaining 20 seats.
The “election” process was spread over three different days—December 16, 18, and 20, 2006.
Arab Uprisings Increase Focus on September 24, 2011, FNC Election
Even before the 2011 Middle East unrest, UAE plans were to gradually expand the size of the
FNC and to broaden its powers, according to the Minister of State for FNC Affairs (also Minister
of State for Foreign Affairs) Anwar Gargash and the FNC speaker Abdul Aziz al-Ghurair.
Currently, the FNC can review, but not enact or veto, federal legislation, and it can question, but
not impeach, federal cabinet ministers. It has questioned government ministers mostly on
economic and social issues although, in April 2009, the government prohibited the FNC from
discussing the economic ramifications for the UAE of the global financial downturn. Its sessions
are open to the public. The government frequently accepts the FNC’s recommendations on
legislation. Each emirate also has its own consultative council. No specific expansion of powers
or time frames for such expansion has been announced, to date, and UAE officials told the author
in May 2012 that further political opening will be gradual.2
Still, the government decided it needed to address the 2011 Arab Spring uprisings and show its
awareness of regional demands for more political rights. On March 8, 2011, the government
expanded the size of the electorate to more than 300 times the total number of FNC seats—a total
of 129,000 electors, or “voters”—for the FNC election process held on September 24, 2011. The
announcement did not prevent the March 9, 2011, presentation to the leadership of a petition
signed by 160 UAE intellectuals for free elections to a body that would have powers similar to
those of a Western-style parliament.3

2 Conversation with visiting UAE official. May 2012.
3 Al Jazeera News Network, March 9, 2011.
Congressional Research Service
4

The United Arab Emirates (UAE): Issues for U.S. Policy

September 24, 2011, Election and Results
A total of 468 candidates filed to run for the 20 seats up for election on September 24, 2011. Of
those, 85 were women. The total is little more than the number of candidates who filed to run in
the 2006 process, but the 2011 electorate was nearly half female, in contrast to the fewer than
20% electors in the 2006 process. There was a restriction that no candidate spend more than about
$545,000 on their campaigns. The election campaign began September 4.
There was widespread press reporting of citizen apathy about the election, with little information
about the election or campaigns in the media, little evidence of any campaigning, and reportedly
little enthusiasm. Those reports proved accurate on election day when turnout averaged about
25%, a figure that Minister of State Gargash called below government expectations. Turnout was
higher than that it the five smallest emirates, but the 21% turnout in the largest emirate, Abu
Dhabi, pulled the overall average down to the 25% level. It was almost exactly 25% in Dubai
emirate. UAE leaders watched turnout as an indicator of public attitudes toward participation in
governance, and the low turnout seemed to affirm the leaders’ judgment that there is not a clamor
for immediate full democracy in the UAE.
Of the 20 winners, only one was female (Sheika Isa Ghanem); she is from Umm Al Quwain, one
of the more conservative emirates. It was believed that female candidates would have the best
chance of winning in Dubai, considered the most liberal of the emirates. Other winners were
elected along tribal lines; in Abu Dhabi, three of the four who were elected are from the Al Amiri
tribe. The FNC as a whole—the election winners and the other twenty to be appointed—began
their sessions in mid-November. Of those appointed, six were women, brining the total number of
women in the FNC to seven. Upon the FNC’s convening, the government selected one of the
appointed members, well-know writer Mohammad al-Murr, as Speaker. A woman and another
appointed member (of the eight appointed women), Amal al-Qubaisi, was selected deputy
speaker, making her the first women to hold so high a position in any GCC legislative body.
But, Substantial Political Unrest Avoided To Date
The relatively minor reforms in the September 2011 FNC election process did not satisfy some
UAE activists. However, through a combination of repressive measures, distribution of largesse,
and highlighting UAE development and economic achievements over forty years, the UAE has
not to date, and is unlikely to, face the widespread popular unrest that has occurred in several
Middle Eastern countries since the beginning of 2011.
There have not been demonstrations in UAE in 2011 or 2012, although early in 2011 some UAE
youth, on social networking outlets such as Facebook and Twitter, discussed holding protests.
Their call for a protest on March 25, 2011, failed to produce a significant demonstration. The
UAE government reportedly tried to block some of these social media sites to prevent the protest
call word from spreading, although most experts attributed the failure of the demonstration to
insufficient public support for opposition activities.
The government has made some selected arrests of political activists. On April 8, 2011, a
prominent Dubai blogger and activist, Ahmad Mansour Al Shehi, was arrested; his detention
came two months after another activist made a speech in Sharjah emirate in support of Egyptian
protesters. Four other critics and online activists were arrested later in April 2011, charged with
violating the penal code that prevents publicly humiliating senior officials; they appeared in court
on June 15 and again on October 2, 2011. Human rights organizations said their trial violated the
Congressional Research Service
5

The United Arab Emirates (UAE): Issues for U.S. Policy

most basic defense of the rights of the accused, and called on UAE leaders to release the five.
Those calls were heeded on November 28, 2011, when federation President Khalifa commuted
the jail sentences of the “UAE-5” that were announced by the Federal Supreme Court the
previous day.
During April and May 2011, the government dissolved the elected board of directors of the Jurist
Association and the Teachers Association, leading civil society groups, after members of their
boards signed petitions for political reforms. The boards were reconstituted with government
appointees. The Jurists’ Association’s Human Rights Committee and the Emirates Human Rights
Association (EHRA), are the only two recognized local human rights organizations in the country.
In December 2011, the government revoked the citizenship of a Muslim Brotherhood figure, who
headed an institution called the “Innovative Thinking Center” in Dubai emirate. The arrests of
several Islah members was discussed above, and probably represents a government effort to
prevent Islamist groups in UAE from adding strength to youth and intellectual-led activism.
In addition to arrests, the government has sought to use its ample financial resources to reduce
domestic unrest. In early March 2011, the government announced it would invest about
$1.5 billion in utilities infrastructure of the poorer, northern emirates. It also raised military
pensions by 70% and introduced subsidies for some foodstuffs.
U.S. Democracy Promotion Efforts/NDI Closing
The United States has sought to promote democracy, rule of law, and civil society in the Persian
Gulf region, including in UAE. Some State Department programs to promote student and
women’s political participation, entrepreneurship, legal reform, civil society, independent media,
and international trade law compliance are funded by the State Department’s Middle East
Partnership Initiative (MEPI). The U.S. Embassy in Abu Dhabi houses a MEPI office/staff that
runs the MEPI programs throughout the Gulf region.
In April 2012, U.S. and other country support for civil society and democratization in the UAE
drew an adverse response from the government, which suggests perhaps increasing government
nervousness about a potential increase in opposition activities. On April 5, 2012, the government
closed the National Democratic Institute (NDI) office in Dubai, and briefly barred both its
American director an Serbian deputy director from leaving the country. NDI had been working
for four years, with license from the UAE government, to promote women’s rights and to advise
on municipal governance. The government also shut down a German democracy-promotion
organization, the Konrad Adenauer Foundation, which was performing work similar to that of
NDI. UAE government representatives continue to insist that NDI and the Adenauer Foundation
were meddling in its internal affairs and that such activity was unacceptable.
General Human Rights-Related Issues
Although the government’s reaction to the few acts of opposition discussed above may color
future assessments, previously the human rights record of the UAE has been assessed by U.S. and
outside organizations as relatively positive on most issues. The State Department human rights
report for 2011 was as critical of the UAE’s human rights practices as previous reports,
asserting—aside from the slow pace of political reform discussed above—that there are
Congressional Research Service
6

The United Arab Emirates (UAE): Issues for U.S. Policy

unverified reports of torture, government restrictions of freedoms of speech and assembly, and
lack of judicial independence.
Press and Research Institute Freedoms
The UAE has generally been praised for allowing a free-wheeling media. The post of Information
Minister was abolished in 2006 to allow for full media independence. However, in April 2009, a
media law drew opposition from some human rights groups who said it allows for penalties
against journalists who personally criticize UAE leaders. Provisions governing media licensing
do not clearly articulate the standards the government will apply in approving or denying licenses
for media organs to operate. The UAE government says the law does not apply to the “Free
Zones” in UAE in which major foreign media organizations operate.
As of 2010, some UAE residents have reported increasing restrictions on the ability of research
institutes to operate. Several such institutes have opened in UAE since the 1990s because of the
perceived openness to free expression and ideas. However, during 2010-2011, the government
applied increasingly strict criteria to licensing research institutes and some, such as the Gulf
Research Center, left the UAE entirely.
Justice/Rule of Law
The UAE has a dual court system. Sharia (Islamic law) courts adjudicate criminal and family law
matters. Civil courts adjudicate civil law matters. There is a Federal Supreme Court that exercises
judicial review over the civil court system, but its writ does not extend to Abu Dhabi, Dubai, or
Ras al-Khaymah. However, according to the State Dept., foreign nationals hold many positions in
the judiciary, making them subject to political influence (because they can be deported easily).
Furthermore, local rulers review criminal and civil cases before referral to prosecutors, and these
political leaders review sentences as well—and the rulers’ decisions supersede those of any court.
Many observers note that justice in UAE is selective. For example, on January 10, 2010, a UAE
court acquitted the UAE president’s brother, Shaykh Issa bin Zayid Al Nuhayyan, on charges of
torturing an Afghan merchant. He was acquitted even though there was a video available of
Shaykh Issa beating the Afghan and driving over his legs with a sport vehicle, and even though
three others involved in the incident, all non-royals, were convicted. The UAE court ruled that
Shaykh Issa was not liable because he was taking prescription drugs that affected his actions.
The UAE justice system has often come under criticism when expatriates are involved. Many
reports indicated that arrests of expatriates and non-citizens increased during the 2008-2009
financial crisis, possibly out of citizen frustration that globalization and dramatic economic
expansion have led to bursting of the economic “bubble” in UAE. In 2007, human rights groups
criticized the conservative-dominated justice system for threatening to prosecute a 15-year-old
French expatriate for homosexuality, a crime in UAE, when he was raped by two UAE men; the
UAE men were later sentenced for sexual assault and kidnapping. In May 2011, a UAE judge
sentenced an American to one month in jail for possessing police handcuffs.
Women’s Rights
Progress on women’s political rights has been steady—as exemplified by the November 2011
appointment of a woman as deputy FNC Speaker. Observers say the UAE is perhaps the only
Congressional Research Service
7

The United Arab Emirates (UAE): Issues for U.S. Policy

country in the Middle East where expatriate women are fully accepted working in high-paying
professions such as finance and banking. Still, women in the UAE are at a disadvantage in
divorce cases and other family law issues.
There are four women in the cabinet: Shayha Lubna al-Qassimi, minister of foreign trade and
planning; Mariam al-Roumi, minister of social affairs; and two ministers without portfolio—
Reem al-Hashimi and Maitha al-Shamsi. Seven women are in the Federal National Council, as
discussed above, and six women serve on the 40-seat consultative council in Sharjah emirate.
About 10% of the UAE diplomatic corps is now female; none served prior to 2001. In November
2008, Dubai emirate appointed 10 female public prosecutors. The UAE Air Force has four female
fighter pilots. The percentage of female voters in the September 2011 FNC election process was
expanded to nearly 50%, as discussed above. As of December 2011, UAE women are allowed to
pass on their citizenship to their children—the first GCC state to allow this.
Religious Freedom
The September 13, 2011, State Department report on international religious freedom, covering
July-December 2010, repeated the previous year’s assessment that there was “no change” in the
status of respect for religious freedom by the government during the reporting period.” The
constitution provides for freedom of religion but also declares Islam as the official religion of the
country. In practice, non-Muslims in UAE are free to practice their religion; there are 35 Christian
churches built on land donated by the ruling families of the various emirates, but there are no
Jewish synagogues or Buddhist temples. There is a Sikh temple that shares a building with one of
two existing Hindu temples. The Shiite Muslim minority is free to worship and maintain its own
mosques, but Shiite mosques receive no government funds and there are no Shiites in top federal
posts.
Labor Rights
On several occasions, foreign laborers working on the large, ambitious construction projects in
Dubai have conducted strikes to protest poor working conditions and non-payment of wages.
Some of these concerns have been addressed by the Labor Ministry’s penalizing of employers,
and a process, formulated in June 2008, to have workers’ salaries deposited directly in banks.
Human Trafficking
Other social problems might be a result of the relatively open economy of the UAE, particularly
in Dubai. The UAE is still considered a “destination country” for women trafficked from Asia and
the former Soviet Union. The Trafficking in Persons report for 2012, released June 19, 2012,
again placed the UAE in “Tier 2”—the same level as in the 2011 and 2010 reports and an upgrade
from the “Tier 2: Watch List” placement in 2009. The Tier 2 placement for 2012 was determined,
as it was in the prior years, on the grounds that the UAE does not meet the minimum standards
for eliminating human trafficking, but is taking significant efforts to do so.
The 2012 report notes that UAE authorities have prosecuted and punished sex trafficking
offenders. However, the UAE has been less diligent in combating forced labor, including
unlawful withholding of passports, restrictions on movement, nonpayment of wages, threats or
physical or sexual abuse. An issue in previous years had been trafficking of young boys as camel
jockeys, but that issue was largely alleviated with repatriation of many of those trafficked, and the
Congressional Research Service
8

The United Arab Emirates (UAE): Issues for U.S. Policy

use of robot jockeys at camel races. The 2011 report credits the government with sustained law
enforcement efforts against sex trafficking, but with failure to take measures against or punish
labor offenses.
Cooperation Against Terrorism and Proliferation
These issues are of particular concern to the United States because of a past pattern of lax UAE
enforcement of export and border controls, with respect particularly to the leakage of U.S. or
other technology to Iran as well as terrorists’ use of the UAE financial system and the presence of
terrorists in the UAE. The relatively small sums of U.S. aid to UAE are generally for programs to
improve UAE performance on enforcing export control laws and on anti-terrorism. This U.S.
assistance—coupled with renewed UAE focus on enacting and enforcing additional export and
border control laws—appears to have alleviated at least some of the U.S. concerns on this issue.
Terrorism Issues
The UAE was one of only three countries (Pakistan and Saudi Arabia were the others) to have
recognized the Taliban during 1996-2001 as the government of Afghanistan, even though the
Taliban was harboring Osama bin Laden and other Al Qaeda leaders during that time. During
Taliban rule, the UAE allowed Ariana Afghan airlines to operate direct service, and Al Qaeda
activists reportedly spent time there.4 Two of the September 11 hijackers were UAE nationals,
and they reportedly used UAE-based financial networks in the plot.
Since then, the UAE has been credited in State Department “Country Reports on Terrorism,”
including the one for 2010 released August 18, 2011, with assisting in the arrests of senior Al
Qaeda operatives;5 denouncing terror attacks; improving border security; prescribing guidance for
Friday prayer leaders to criticize extremist ideology; investigating suspect financial transactions;
criminalizing use of the Internet by terrorist groups, and strengthening its bureaucracy and legal
framework to combat terrorism. The UAE Central Bank is credited in that State Department
report for providing training programs to UAE financial institutions on money laundering and
terrorism financing, although actions against informal financial transmittals (hawala) require
“further vigilance.” It was reported in September 2009 that earlier in 2009, UAE security officials
had broken up an Al Qaeda plot to blow up targets in Dubai emirate.6 UAE authorities assisted in
foiling an October 29, 2010, Al Qaeda in the Arabian Peninsula plot to send bombs to the United
States.
Port and Border Controls
The UAE has signed on to several U.S. efforts to prevent proliferation and terrorism. These
include the Container Security Initiative Statement of Principles, aimed at screening U.S.-bound
containerized cargo transiting Dubai ports. Under it, three U.S. Customs and Border Protection

4 Department of State. Office of the Coordinator for Counterterrorism. Country Reports on Terrorism 2010. August 18,
2011. Author conversations with executive branch officials, 1997-2011.
5 “U.S. Embassy to Reopen on Saturday After UAE Threat.” Reuters, March 26, 2004.
6 Lake, Eli and Sarah Carter. “UAE Kept Tight Lid on Disrupted Terror Plot.” Washington Times, September 17, 2009.
Congressional Research Service
9

The United Arab Emirates (UAE): Issues for U.S. Policy

officers are co-located with the Dubai Customs Intelligence Unit at Port Rashid in Dubai. The
program results in about 20 ship inspections per week of U.S.-bound containers, many of them
apparently originating in Iran. The UAE is a party to the Proliferation Security Initiative, the
Megaports Initiative designed to prevent terrorist from using major ports to ship illicit material,
and the Customs-Trade Partnership Against Terrorism.
Export Controls
The UAE record on preventing the re-export of advanced technology, particularly to Iran, has
been mixed in past years, but has improved considerably since mid-2010. Taking advantage of
geographic proximity and the high volume of Iran-Dubai trade ($10 billion per year), numerous
Iranian entities involved in Iran’s energy sector and its WMD programs have offices in the UAE
that are used to try to procure needed technology and equipment. In connection with revelations
of illicit sales of nuclear technology to Iran, Libya, and North Korea by Pakistan’s nuclear
scientist A.Q. Khan, Dubai was named as a key transfer point for Khan’s shipments of nuclear
components. Two Dubai-based companies were apparently involved in transshipping
components: SMB Computers and Gulf Technical Industries.7 On April 7, 2004, the
Administration sanctioned a UAE firm, Elmstone Service and Trading FZE, for allegedly selling
weapons of mass destruction-related technology to Iran, under the Iran-Syria Non-Proliferation
Act (P.L. 106-178). In June 2006, the Bureau of Industry and Security (BIS) released a general
order imposing a license requirement on Mayrow General Trading Company and related
enterprises in the UAE. This was done after Mayrow was implicated in the transhipment of
electronic components and devices capable of being used to construct improvised explosive
devices (IED) used in Iraq and Afghanistan.8
In January 2009, the Institute for Science and International Security issued a report entitled
“Iranian Entities’ Illicit Military Procurement Networks,” published January 12, 2009. The report
asserted that Iran has used UAE companies to obtain technology from U.S. suppliers, and that the
components obtained have been used to construct improvised explosive devices (IEDs) shipped
by Iran to militants in Iraq and Afghanistan. Other UAE companies the report alleges were
involved in this network included not only Mayrow but also Majidco Micro Electronics, Micatic
General Trading, and Talinx Electronics.
The UAE has enhanced its cooperation at times when U.S. officials or outside experts have
questioned its performance. In February 2007 the Administration threatened to form a new
category of control called “Destinations of Diversion Control” with UAE as the intended
designee country. In September 2007, the FNC adopted a law strengthening export controls (April
2007). That month, the UAE government used the new law to shut down 40 foreign and UAE
firms allegedly involved in dual use exports to Iran and other countries. On July 22, 2010, Deputy
Assistant Secretary of State for International Security and Nonproliferation Vann Van Diepen
testified before the House Foreign Affairs Committee (Subcommittee on Terrorism,
Nonproliferation and Trade) that the UAE had augmented the staff of the office that implements
the 2007 law. He added that the UAE’s enforcement bodies—customs, law enforcement, and
intelligence services—are functioning to that end.9 A 2010 Iran sanctions law, the Comprehensive

7 Milhollin, Gary and Kelly Motz. “Nukes ‘R’ US.” New York Times op.ed. March 4, 2004.
8 BIS, “General Order Concerning Mayrow General Trading and Related Enterprises,” 71 Federal Register 107, June 5,
2006.
9 Testimony of Mr. Vann Van Diepen before the House Foreign Affairs Committee. July 22, 2010.
Congressional Research Service
10

The United Arab Emirates (UAE): Issues for U.S. Policy

Iran Sanctions, Accountability, and Divestment Act (CISADA, P.L. 111-195) created a category
of countries that would be sanctioned (restrictions on dual use U.S. exports) for a determination
of non-cooperation, but the improved performance of the UAE on this issue has caused this
provision not to be invoked with respect to the UAE.
The issue of leakage of technology has sometimes caused U.S. criticism or questioning of UAE
investment deals. In December 2008, some Members of Congress called for a review by the inter-
agency Committee on Foreign Investment in the United States (CFIUS) of a proposed joint
venture between Advanced Micro Devices and Advanced Technology Investment Co. of Abu
Dhabi for the potential for technology transfers. In February 2006, CFIUS approved the takeover
by the Dubai-owned “Dubai Ports World” company of a British firm that manages six U.S. port
facilities. Members, concerned that the takeover might weaken U.S. port security, opposed it in
P.L. 109-234, causing the company to divest assets involved in U.S. port operations (divestment
completed in late 2006 to AIG Global Investments). Little opposition was expressed to a
September 2007 Borse Dubai plan to take a 20% stake in the NASDAQ stock market, or to a
November 2007 investment of $7.5 billion in Citigroup by the Abu Dhabi Investment Authority
(ADIA).
Nuclear Agreement10
It was concern about the leakage of technology to Iran, via the UAE, that underpinned
Congressional and other concerns about a U.S.-UAE agreement, signed January 15, 2009, to help
the UAE develop a nuclear power program. The government of the United Arab Emirates (UAE)
announced in 2008 an ambitious plan to acquire its first nuclear power reactors to satisfy
projected increases in domestic electricity demand.11
Policymakers and advisers in the government of Abu Dhabi, in consultation with representatives
from the other six emirates, are guiding the program’s implementation. A number of U.S. and
European firms have secured administrative and financial advisory contracts with the program.
The agreement for the United States to assist the program, subject to conditions specified in
Section 123 of the Atomic Energy Act of 1954 [42 U.S.C. 2153(b)], was signed by the Obama
Administration on May 21, 2009 (and submitted to Congress that day). It became effective when
Congress declined to block the arrangement within 90 days of continuous legislative session
following the May 21 submission. Several congressional resolutions of approval of the agreement
(S.J.Res. 18 and H.J.Res. 60) were introduced, compared to only one disapproving (H.J.Res. 55).
No measure blocking the agreement was enacted, and the “1-2-3 Agreement” entered into force
on December 17, 2009. Nor was an earlier bill in the 111th Congress, H.R. 364, requiring the
President to certify that the UAE has taken a number of steps to stop illicit trade with Iran before
any agreement would take effect, enacted into law.
In January 2010, the UAE announced that it had chosen the Korea Electric Power Corporation
(KEPCO of South Korea) to construct the first of four APR1400 nuclear reactors that would sell
electricity to the Abu Dhabi Water and Electricity Authority. The first plant is expected to start

10 This section was prepared by Paul Kerr, Analyst in Weapons of Mass Destruction Nonproliferation,
CRS. See CRS Report R40344, The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear
Cooperation
, by Christopher M. Blanchard and Paul K. Kerr.
11 UAE officials estimate that their country must expand its power generation and transmission capacity
from the current level of 16 gigawatts to 40 gigawatts by 2020 in order to meet projected demand increases
Congressional Research Service
11

The United Arab Emirates (UAE): Issues for U.S. Policy

operating in 2017 and the other three are scheduled to be completed and operational by 2020,
according to the UAE.12 The plant construction is to take place at Baraka, near Abu Dhabi’s
western border with Saudi Arabia, pending final approval by the UAE Federal Authority for
Nuclear Regulation.13
The Emirates Nuclear Energy Corporation (ENEC) announced in July 2011 that it has begun a
“procurement competition” to obtain fuel supplies for the four proposed reactors.14 “The final
contracts are expected to be signed in the first quarter of 2012,” according to the ENEC. No
specific decisions have been made regarding the disposition of spent reactor fuel. The UAE has
committed to refrain from domestic uranium enrichment and reprocessing spent nuclear reactor
fuel. Enrichment and reprocessing are considered to the most sensitive parts of the nuclear fuel
cycle because they can both produce fissile material for nuclear weapons.
The International Atomic Energy Agency announced December 14, 2011, that a group of experts
had completed a review of the UAE’s “regulatory framework for nuclear safety and radiation
protection.” Providing further reassurances to U.S. officials, the review both “noted good
practices” and provided suggestions to the Federal Authority for Nuclear Regulation, the UAE’s
nuclear regulatory authority.15
Foreign Policy and Defense
Following the 1990 Iraqi invasion of Kuwait and the 1991 U.S.-led war to oust Iraqi forces from
Kuwait, the UAE determined that it needed a closer security relationship with the United States.
The UAE did not necessarily fear a direct threat from Saddam Hussein’s Iraq, which is at the
north end of the Persian Gulf, but the UAE saw the United States as the key actor in any
successful effort to balance out Iranian power—a primary UAE concern. That cooperation has
taken on numerous dimensions, including purchase of advanced missile defense capabilities
designed to counter Iranian ballistic missiles, as well as U.S. military deployments intended to
demonstrate resolve to Iran. Beyond the Gulf, UAE actions and responses to the 2011-12 unrest
in the Middle East suggest that the UAE is more assertive on foreign policy posture than it has
been in the past in an effort to create and preserve regional stability.
Regional Security Cooperation With the United States
The framework for U.S.-UAE defense cooperation is a July 25, 1994, bilateral defense
agreement, the text of which is classified, including a “status of forces agreement” (SOFA).16
Under the pact, the UAE has allowed U.S. equipment pre-positioning and U.S. warship visits at
its large Jebel Ali port, capable of handling aircraft carriers, and it permitted the upgrading of
airfields in the UAE that were used for U.S. combat support flights during Operation Enduring

12 http://enec.gov.ae/our-nuclear-energy-program/prime-contractor/.
13 http://enec.gov.ae/our-nuclear-energy-program/preferred-site/.
14 http://www.enec.gov.ae/media-centre/news/content/emirates-nuclear-energy-corporation-begins-nuclear-fuel-
procurement-co.
15 http://www.iaea.org/press/?p=2572.
16 Some provisions are discussed in Sami Hajjar, U.S. Military Presence in the Gulf: Challenges and Prospects (U.S.
Army War College: Strategic Studies Institute), March 2002, p. 27.
Congressional Research Service
12

The United Arab Emirates (UAE): Issues for U.S. Policy

Freedom in Afghanistan and Operation Iraqi Freedom (OIF).17 According to Secretary of Defense
Leon Panetta in November 2011, there are about 3,000 U.S. forces, mostly Air Force, in UAE.
That is up from 800 before OIF. They use Al Dhafra air base (mostly KC-10 refueling) and naval
facilities at Fujairah to support U.S. operations in Iraq and Afghanistan, even though UAE
officials say that OIF benefitted Iran strategically.
In the wake of the U.S. withdrawal from Iraq that was completed on December 15, 2011. U.S.
officials said there were no plans to increase these numbers, either in UAE or elsewhere in the
Gulf. However, in late April 2012, possibly to signal additional resolve over Iran’s nuclear
program, the United States reportedly deployed several “Stealth” F-22 Raptor combat aircraft to
Al Dhafra air base.18
The U.S.-UAE defense pact has also reportedly included U.S. training of UAE armed forces,
These forces are relatively small—about 51,000, but are considered to have benefitted extensively
from U.S. and other training. U.S. military officers say that UAE operators of HAWK surface-to-
air missile batteries are on par with U.S. operators of that system, and that UAE fighter pilots are
“combat ready.” This was proved in operations in Libya in 2011, discussed below, where pilots
proved capable tacticians. At the Air Warfare Center near Al Dhafra Air Base, UAE and U.S.
forces conduct extensive exercises on early warning, air and missile defense, and logistics. The
UAE also hosts the Integrated Air Missile Defense Center, a major training facility for Gulf and
U.S.-GCC cooperation on missile defense. In FY2010, 359 UAE military stutdents trained in the
United States, mostly through the Foreign Military Sales program through which the UAE buys
most of its U.S.-made arms.
U.S. and Other Arms Sales
The UAE views arms purchases from the United States as enhancing the U.S. commitment to
UAE security. The United States views these sales as a means to enhance the U.S.-led security
architecture for the Gulf in which the Gulf partners take on increased responsibilities. Friom
2007-2010, the UAE agreed to acquire more U.S. defense articles and services through the
Foreign Military Sales program—$10.4 billion worth—than any other country in the world
except Saudi Arabia.19 Until 2008, the most significant buy was the March 2000 purchase of 80
U.S. F-16 aircraft, equipped with the Advanced Medium Range Air to Air Missile (AMRAAM)
and the HARM (High Speed Anti-Radiation Missile), a deal exceeding $8 billion. Congress did
not try to block the aircraft sale, but some Members questioned the AMRAAM as an introduction
of the weapon into the Gulf. Among other sales with the potential to enhance the UAE’s offensive
capability, a sale of High Mobility Artillery Rocket Systems (HIMARS) and Army Tactical
Missile Systems (ATACMs), valued at about $750 million, announced on September 21, 2006.
THAAD and Other Major Missile and Air Defense Systems
More recent sales to UAE, some with offensive potential, have been in concert with the U.S.-led
“Gulf Security Dialogue,” intended to help the Gulf states contain Iran. The UAE is a key
participant in U.S. efforts to build a missile defense shield for the Gulf, in order to deter or

17 Jaffe, Greg. “U.S. Rushes to Upgrade Base for Attack Aircraft.” Wall Street Journal, March 14, 2003.
18 Washington Post, April 28, 2012.
19 CRS Report: U.S. Arms Sales: Agreement with and Deliveries to Major Clients, 2003-2010.
Congressional Research Service
13

The United Arab Emirates (UAE): Issues for U.S. Policy

contain Iran. That effort was discussed extensively in two State Department visits to the region—
on March 31, 2012, Secretary Clinton attended the first ministerial meeting of the U.S.-GCC
Strategic Cooperation Forum in Riyadh, Saudi Arabia, which focused on the integrated Gulf
missile defense plan. Subsequently, deputy Assistant Secretary of State Frank Rose spoke in Abu
Dhabi on April 12, 2012,20 on the missile defense issue, saying:
As our partners acquire greater missile defense capabilities, the United States will work to
promote interoperability and information sharing among the GCC states. This will allow for
more efficient missile defenses and could lead to greater security cooperation in the region.
For the UAE, the most significant missile defense purchase is of the Terminal High Altitude Air
Defense System (THAAD), the first sale ever of that sophisticated missile defense system
(announced September 9, 2008, valued at about $7 billion). The main manufacturer, Lockheed
Martin, said in June 2010 that a firm agreement for three THAAD fire units with 147 THAAD
missiles and four radar sets might be signed in the next few months, although the firm said in
August 2011 that the UAE might reduce the buy somewhat.21 That prediction proved accurate
when, on December 31, 2011, the Defense Department announced the two countries had reached
a final deal to sell the UAE 96 of the THAAD missiles, along with the firing units, with a total
estimated value of the sale at $3.48 billion, about half of what was first envisioned.
Among significant other recent missile defense sales are the advanced Patriot anti-missile systems
(PAC-3, up to $9 billion value, announced December 4, 2007). Also announced on September 9,
2008, were sales to UAE of a surface launched AMRAAM ($445 million value) and vehicle
mounted “Stinger” anti-aircraft systems ($737 million value).
Other Major Recent Sales Include Joint Direct Attack Munitions
In conjunction with the international defense exhibit in Abu Dhabi in March 2009, the UAE
signed agreements with Boeing Co. and Lockheed Martin Corp. to buy $3 billion worth of
military transport aircraft (C-17 and C-130, respectively). On November 4, 2010, the Defense
Security Cooperation Agency notified Congress of two potential sales: $140 million worth of
ATACMs (see above) and associated support; and a possible $5 billion worth of AH-64 Apache
helicopters (30 helicopters, remanufactured to Block III configuration).22 In 2011, a notification
was made for $300 million worth of support for UAE’s F-16 fleet and AIM-9X missiles. On
September 22, 2011, there was notification to Congress of a possible sale of 500 “Hellfire”
missiles and related equipment and services, a total estimated cost of $65 million. There was a
December 14, 2011, notification of a potential sale to the UAE of 260 JAVELIM anti-tank guided
missiles and associated equipment and support at a total value of $60 million.
Congress was notified by DSCA on November 30, 2011, of a potential sale that has caused
discussion (transmittal number 10-56). The sale is for 4,900 Joint Direct Attack Munitions
(JDAM) kits with an estimated value of $304 million. The widespread perception was that the
munitions could potentially be used to strike hard targets, such as nuclear facilities in Iran,
although there are no indications the UAE would contemplate such a strike on its own, no matter

20 U.S. Department of State Daily Digest Bulletin, April 12, 2012.
21 Jim Wolf. “UAE Said to Trim Planned US Missile-Defense Purchase.” Reuters, August 24, 2011.
22 DSCA transmittal number 10-52. http://www.dsca.mil.
Congressional Research Service
14

The United Arab Emirates (UAE): Issues for U.S. Policy

its concerns about Iran. The United States had previously sold the UAE JDAM kits worth $326
million value, announced January 3, 2008.
The United States is hoping to sell the UAE additional F-16’s, according to press reports.
However, France is hoping to instead sell the UAE up to 60 Rafale combat aircraft, which could
be valued at $10 billion. No decision on acquiring additional combat aircraft has been announced
by UAE officials.
Defense Relations with Other Nations and Alliances
In addition, in recent years, perhaps deciding it cannot rely solely on the United States, the UAE
has sought to broaden its defense relationships. 2004, the UAE joined NATO’s “Istanbul
Cooperation Initiative,” which was launched that year by NATO as an effort to bolster bilateral
security with Middle Eastern countries. The UAE has “observer” status in NATO and, in May
2011, the UAE requested to send an Ambassador to NATO under a new alliance policy approved
by the organization in April 2011.
France is a major defense partner for the UAE. In January 2008 the UAE signed an agreement
with then French President Nicolas Sarkozy to allow a French military presence. The facilities
were inaugurated during a visit by Sarkozy to UAE on May 27, 2009, and include (1) a 900-foot
section of the Zayid Port for use by the French navy; (2) an installation at Dhafra Air Base to be
used by France’s air force; and (3) a barracks at an Abu Dhabi military camp that will house about
400 French military personnel. On the other hand, in October 2010, the UAE reportedly
threatened to ask Canada to evacuate a UAE base, Camp Mirage, used by Canada as a staging
point for its forces to deploy to Afghanistan, when Canada refused additional landing slots in
Canada for Emirates Air.23 The two countries subsequently negotiated a solution to the mutual
concerns. The UAE has already bought 380 French-made Leclerc tanks and 60 Mirage 2000
warplanes.
The UAE has also looked to the private sector to augment its security. The UAE confirmed on
May 15, 2011, that it had retained the U.S. private firm Reflex Responses, to provide
“operational, planning, and training support,” to the UAE military. The statement followed a New
York Times
report that the UAE had hired the firm, which is run by the founder of the well-known
Blackwater Worldwide security contractor, to a $529 million contract to build a foreign
mercenary battalion to help defend the UAE from internal revolt or related threats—an account
based partly on observations of foreign nationals entering the UAE to undergo training at a UAE
base.24 The State Department stated subsequently that it is investigating the reports to determine
whether it violates any U.S. laws controlling the export of U.S. defense technology and expertise.
Other Cooperation on Iran
Acting to address the potential threat from Iran—the highest priority foreign policy issue for the
UAE—the UAE has cooperated with non-military related U.S. efforts to counter Iranian power
and capabilities. However, the UAE has a large population of Iranian expatriates and historic

23 Chase, Steven and Brent Jang. “UAE Threatens to Kick Canada Out of Covert Military Base Camp Mirage.” Toronto
Globe and Mail, October 8, 2010.
24 http://www.nytimes.com/2011/05/15/world/middleeast/15prince.html?_r=1&partner=rss&emc=rss.
Congressional Research Service
15

The United Arab Emirates (UAE): Issues for U.S. Policy

commercial ties to Iran. In order to deny Iran any justification for aggression or adverse action,
continues to allow many Iranian firms (primarily import-export companies) and individuals to
operate there.
The Iranian involvement in the UAE economy has also given the United States the opportunity to
enlist the UAE in a multilateral effort to stiffen international sanctions on Iran—the so-called
“coalition of like minded countries.” In October 2009, Foreign Minister Abdullah bin Zayid was
uncharacteristically public in expressing support for “political and diplomatic pressure on Iran to
stop it from acquiring nuclear technology.” The 2010 GCC summit, held in Abu Dhabi and
concluded December 7, 2010, called for a peaceful resolution of the Iran nuclear issue, although
expressing “utmost concern” about Iran’s program; similar language was repeated following the
GCC summit that ended December 20, 2011. These comments add to UAE statements that reflect
GCC backing for more aggressive U.S. action to set back Iran’s program.
In terms of concrete action, in October 2010, the UAE government directed its banks to fully
comply with the restrictions on dealing with Iranian banks outlined in U.N. Security Council
Resolution 1929, adopted June 9, 2010. The move caused a 15% drop in the value of Iran’s
currency, the rial. In advance of UAE attendance at a “coalition of like minded countries”
meeting in Rome on December 21, 2011, rumors swept Iran that UAE-Iran trade was being
halted, and the rial fell dramatically. A major UAE step came in late February 2012, when a
Dubai bank, the Noor Islamic Bank, announced it would no longer handle transactions with
Iranian banks; Iran has used that bank to process much of its receipts of hard currency for its oil
sales internationally.25 UAE representatives say that Iranian-owned banks that continue to operate
in UAE, including Bank Saderat and Bank Melli, do so only in cash and are relatively inactive.
Closing them outright would, according to UAE officials, unduly antagonize Iran.
The United States also has enlisted the cooperation of the UAE and other Gulf oil producers to
sell additional oil to European Union countries, which adopted a voluntary ban on buying Iranian
oil that took full effect on July 1, 2012. Still, reflecting the UAE’s free and open trading regimen
and unwillingness to antagonize Iran outright, there continue to be reports that some small firms
in the UAE continue to supply gasoline to Iran even though such activity is potentially
sanctionable under CISADA, referred to earlier.
Some Iranian actions may account for the UAE’s strategic closeness to the United States and
other Western powers. UAE fears of Iran have been elevated since April 1992, when Iran asserted
complete control of the largely uninhabited Persian Gulf island of Abu Musa, which it and the
UAE shared under a 1971 bilateral agreement. (In 1971, Iran, then ruled by the U.S.-backed
Shah, seized two other islands, Greater and Lesser Tunb, from the emirate of Ras al-Khaymah, as
well as part of Abu Musa from the emirate of Sharjah.) The UAE has called for peaceful
resolution of the issue through direct negotiations, the International Court of Justice, or another
agreed international forum. In October 2008, the UAE and Iran signed an agreement to establish a
joint commission to resolve the dispute; that agreement came two months after the UAE protested
Iran’s opening in August 2008 of administrative and maritime security offices on Abu Musa. Iran
has allowed Sharjah to open power and water desalination facilities on the island. The 2010 GCC
summit in Abu Dhabi, referenced above, nodded to UAE concerns by demanding Iran return the
UAE islands.

25 Alan Cowell. “Dubai Bank Reduces Ties With Iran, It Reports.” New York Times, March 1, 2012.
Congressional Research Service
16

The United Arab Emirates (UAE): Issues for U.S. Policy

The issue was inflamed significantly on April 11, 2012, when Iranian President Mahmoud
Ahmadinejad visited Abu Musa and spoke to the inhabitants there, mostly Iranian fishermen. The
UAE withdrew its ambassador from Tehran, and UAE officials say the action undermined many
months of patient behind-the-scenes UAE-Iran diplomacy on the issue, including the naming of
negotiators on both sides. Consistent with its past positions, on April 17, 2012, State Department
spokesperson Mark Toner said the United States supports the UAE’s call to negotiate the dispute.
The U.S. statement, as have past U.S statements on this issue, took no position on the legal
sovereignty of the islands, but it criticized the Ahmadinejad visit as a step that complicates efforts
to settle the issue. Iran further antagonized the UAE on the issue with a May 2, 2012, to the island
by Revolutionary Guard Corps commander-in-chief Mohammad Ali Jafari, accompanied by
several Iranian parliamentarians, to discuss making the island a tourist hub.
The UAE, particularly Abu Dhabi, has long feared that the large Iranian-origin community in
Dubai emirate (estimated at 400,000 persons) could pose a “fifth column” threat to UAE stability.
Illustrating the UAE’s attempts to avoid antagonizing Iran, in May 2007, Iranian President
Mahmoud Ahmadinejad was permitted to hold a rally for Iranian expatriates in Dubai when he
made the first high-level visit to UAE since UAE independence in 1971. Reflecting the
underlying tensions of UAE-Iran relations, the two countries issued mutual recriminations in
January 2009 over the UAE decision in late 2008 to begin fingerprinting Iranian visitors to UAE.
Cooperation on Iraq
Aside from allowing U.S. use of UAE military facilities, the UAE has undertaken several
initiatives to support U.S. efforts to stabilize Iraq since the fall of Saddam Hussein. The UAE has
provided facilities for Germany to train Iraqi police. Agreeing with the U.S. view that Sunni Arab
states need to engage the Shiite-dominated government in Baghdad, in June 2008, the UAE
appointed an Ambassador to Iraq, Abdullah Ibrahim al-Shehi, the first Arab country to do so. The
following month it wrote off $7 billion (including interest) in Iraqi debt. Abu Dhabi Crown Prince
Shaykh Mohammad bin Zayid visited Iraq in October 2008. The UAE tended to defer to Saudi
Arabia in its efforts to encourage inclusion of high profile Sunni Arabs in the new Iraqi
government formed in late 2010. In October 2011, the UAE announced it intends to open a
consulate in the Kurdish region of Iraq which comprises three northern provinces and is
administered by the Kurdistan Regional Government (KRG), a legally constituted region within
Iraq. The consulate has not opened, to date.
In humanitarian efforts, the UAE has provided about $215 million for Iraq reconstruction but has
provided the funds not in cash but in the form of humanitarian contributions. Some of the funds
have been used to rebuild hospitals in Iraq and to provide medical treatment to Iraqi children in
the UAE. Bilateral trade is estimated at about $5 billion, and UAE companies reportedly are
considering new investment in housing and other projects in Iraq.
Cooperation on Afghanistan and Pakistan
In addition to placing some of its military facilities at U.S. and allied disposal for use in
Afghanistan (and Iraq), the UAE is assisting the U.S. and international mission to stabilize
Afghanistan. Despite the small size of its military force, a 250-person contingent of UAE troops
has been serving in Afghanistan since 2003. The UAE forces, the only Arab combat forces in
Afghanistan, are operating in the restive southern part of Afghanistan, particularly Uruzgan
Province, where they appear to be welcomed by the Muslim population there.
Congressional Research Service
17

The United Arab Emirates (UAE): Issues for U.S. Policy

The UAE has pledged a total of $323 million in economic aid for Afghanistan since the fall of the
Taliban. Among the projects funded with UAE aid include “Zayed University,” a college serving
over 6,000 Afghan students per year; six medical clinics; a major hospital with a capacity of
7,000 patients; the building of “Zayed City” that houses 200 Afghan families displaced by
violence; 160 drinking wells; and 38 mosques.26
In related aid for U.S. regional policy, Abu Dhabi hosted the November 2008 meeting of the
“Friends of Pakistan” donors group that is attempting to help Pakistan through its financial
difficulties. The UAE provided about $100 million to aid victims of a major earthquake in
Pakistan in October 2005, and substantial amounts in 2010 to help victims of flooding there. The
UAE also appointed a direct counterpart to the Obama Administration’s Special Representative
for Afghanistan and Pakistan (SRAP), the position held by Ambassador Marc Grossman.
Other Regional Issues: Response to 2011 Unrest in the Middle East
The UAE has joined its GCC allies in attempting to keep the uprisings elsewhere in the Arab
world from affecting the GCC states themselves. It has supported rebel movements in other Arab
states, such as Libya and, to a lesser extent, Syria. The UAE joined other GCC states in
supporting the Al Khalifa regime in Bahrain during its confrontations with protesters and, on
March 14, 2011, it sent 500 UAE police to join a 1,000 troop Saudi force that deployed to
Bahrain to help the regime protect key locations. The UAE, Saudi Arabia, Kuwait, and Qatar, the
wealthiest of the GCC states, also have pledged financial help to Bahrain and Oman, the two
GCC states where substantial protests have taken place in 2011. The UAE police pulled out of
Bahrain in concert with a broader withdrawal of the GCC country forces in late June 2011, after
the state of emergency in Bahrain ended on June 1, 2011.
On Libya, the UAE played a significant role in supporting the opposition to Muammar Qadhafi,
which succeeded in ending his regime in late August 2011. It sent six (a squadron) of its U.S-
made F-16s and six Mirage fighters (a squadron) to participate in the NATO-led no-fly zone
enforcement and ground target strike operations in Libya. On May 10, 2011, Abu Dhabi hosted a
major meeting of Libyan dissidents, including representatives of cities and towns still formally
under the Qadhafi regime control. In June 2011, in the context of its hosting a meeting of the
international Libya Contact Group, the UAE formally recognized the Benghazi-based
Transitional National Council (TNC) as the sole representative of the Libyan people and pledged
financial support to the TNC. In March 2012, the UAE announced it would transfer its 58 aging
Mirage 2000 combat aircraft to the fledgling post-Qadhafi government.
In Yemen, the UAE has joined a high-profile GCC mediation effort that reached an agreement for
President Ali Abdullah Saleh to step down in favor of a political transition. President Saleh was
injured in an assassination attempt in June 2011 and recuperated in Saudi Arabia, but he returned
to the country in November 2011 with intentions that were unclear. He later signed the transition
agreement and departed Yemen on January 22, 2012.
The UAE did not initially taken a clear position against President Bashar Al Assad of Syria’s
crackdown against burgeoning dissent, apparently fearing that Assad’s downfall could cause his
close ally, Iran, to increase its meddling in the Gulf to compensate for a loss of influence in the

26 Information provided to CRS by the UAE Embassy in Washington, DC, December 2009.
Congressional Research Service
18

The United Arab Emirates (UAE): Issues for U.S. Policy

Levant. Still, UAE leaders see Assad’s fall as key to weakening Iran in the Middle East and, in
line with the other GCC states, the UAE shifted more decisively against Assad when opposition
in Syria increased in mid-2011. In November 2011, after the Arab League suspended Syria’s
membership because of its crackdown, the UAE embassy in Damascus was attacked, among
other embassies. It closed its embassy there, along with the other GCC states, in February 2012,
after the U.N. Security Council failed to act on a resolution demanding President Assad yield to a
transition of power. The UAE joined its GCC allies in early April 2012, during a multinational
conference on Syria in Istanbul, in offering about $100 million in funds to Syrian rebels, to be
used as salaries and also presumably to buy weapons and services useful to their cause. However,
in contrast to Saudi Arabia and Qatar, the UAE is not reported to be shipping weapons to the
Syrian rebels.
Other Regional Issues: Arab-Israeli Dispute
On most regional issues, including the Arab-Israeli dispute, the UAE does not follow U.S. policy
strictly or uncritically, but it does generally agree with most U.S. assessments of regional threats,
and it supports U.S. diplomatic efforts to resolve regional issues. On the Arab-Israeli issue, the
UAE wants to ensure that any settlement between Israel and the Palestinians is “just,” meaning
sufficiently beneficial to the Palestinians. It has sometimes criticized the United States as
excessively supportive of Israel, although it generally expresses that criticism in private meetings
with U.S officials. UAE leaders have publicly backed the Palestinian Authority’s bid for
statehood recognition at the United Nations General Assembly, launched in September 2011—a
proposal the United States opposes as premature and preemptive of Israeli-Palestinian
negotiations.
The UAE has not advanced its own far-reaching proposals to resolve the Israeli-Palestinian
dispute, as has King Abdullah of Saudi Arabia. Nor has UAE tried to directly mediate between
Palestinian factions, as have Saudi Arabia, Qatar, or Egypt. In 1994 the UAE joined with the
other Gulf monarchies in ending enforcement of the Arab League’s boycott of companies doing
business with Israel and on companies that deal with companies that do business with Israel. The
UAE formally bans direct trade with Israel, although UAE companies reportedly do business with
Israeli firms and some Israeli diplomats have attended multilateral meetings in the UAE. Unlike
Qatar and Oman, the UAE did not host multilateral Arab-Israeli working groups on regional
issues when those talks took place during 1994-1998. In 2007, the UAE joined a “quartet” of
Arab states (the others are Saudi Arabia, Egypt, and Jordan) to assist U.S. diplomacy on Israeli-
Palestinian issues, and it attended the Annapolis summit on the issue that year.
The UAE has sometimes put its considerable financial resources to work on behalf of the
Palestinians. One major UAE action has been to fund a housing project in Rafah, in the Gaza
Strip, called “Shaykh Khalifa City.” It also has given economic aid to Lebanon, perhaps in part to
counter Iranian and Syrian influence there—an objective that UAE shares with Saudi Arabia and
the other GCC states. In December 2008 and January 2009, the UAE government permitted street
demonstrations in support of Hamas during its war with Israel. In February 2009, the UAE denied
a visa to an Israeli tennis player who was to participate in a Dubai tennis tournament, earning the
UAE some international criticism. It also aggressively investigated and, based on evidence
developed, formally accused Israel in the killing of Hamas leader at a Dubai hotel in January
2010.
Congressional Research Service
19

The United Arab Emirates (UAE): Issues for U.S. Policy

Border Issues
The UAE cooperates with virtually all GCC-wide development and economic initiatives,
although some past border disputes and other disagreements with Saudi Arabia occasionally flare.
A 1974 “Treaty of Jeddah” with Saudi Arabia formalized Saudi access to the Persian Gulf via a
corridor running through UAE, in return for UAE gaining formal control of villages in the
Buraymi oasis area.
UAE Provision of Foreign Aid27
The UAE asserts that it has provided billions of dollars in international aid through its
government and through funds controlled by royal family members and other elites. Among the
foreign aid activities reported are $100 million to aid victims of the December 2004 tsunami in
the Indian Ocean and $100 million to help victims of Hurricane Katrina in the United States in
2005. Among other initiatives:
• The Abu Dhabi Fund for Development (ADFD), established in 1971, has
distributed about $3.5 billion to 207 projects in 53 countries. Of this amount,
about $240 million was distributed in 2010. In August 2011, the fund was used to
donate $250 million for reconstruction projects in Afghanistan.
• In May 2011, the UAE donated $20 million for post-flood relief efforts in
Pakistan. Also that month, it donated $30 million to the Australian state of
Queensland to fund cyclone shelters.
• In June 2011, the UAE pledged $3 billion in aid for post-Mubarak Egypt. Other
aid has been provided to post-Qadhafi Libya.
• In July 2011, UAE foundations responded to a U.N. appeal for aid to the victims
of a drought in East Africa.
• In February 2012, the UAE announced an additional $2 million donation to the
Local Stability Fund that provides relief to victims of conflict in Somalia.
• The UAE has donated substantial sums for causes in the United States, including
$150 million for a cancer center at the University of Texas; $100 million to assist
New Orleans after Hurricane Katrina in 2005; $150 million to a children’s
medical center in Washington, DC, in 2009; and $1 million worth of Apple laptop
computers to the Joplin, Missouri, public schools systems in the wake of the May
2011 tornado there.
Economic Issues
The UAE, a member of the World Trade Organization (WTO), has developed a free market
economy, widely considered weakly regulated. Partly as a result, the UAE, particularly Dubai
emirate, whose strategy was built on attracting investment to construct large numbers of opulent
and futuristic projects, built up a “bubble” in real estate prices and other assets. The UAE,
particularly Dubai, was therefore hurt significantly by the global economic downturn. At the

27 Factsheet provided by UAE Embassy in Washington, DC, June 2011.
Congressional Research Service
20

The United Arab Emirates (UAE): Issues for U.S. Policy

height of the financial crisis, there were widespread layoffs in UAE and the departure of
thousands of foreign workers, who often abandoned cars and properties that were financed,
leaving UAE banks with additional non-performing loans.28 During 2008-2009, real estate prices
fell about 40%-50% from the 2007 levels. The downturn in real estate prices also affected
regional investors, such as those in Afghanistan, who bought into high-end housing such as on the
Palm Islands. The fall in value nearly caused a collapse of a major Afghan bank, Kabul Bank, in
September 2010; the bank had made large loans to prominent Afghan power brokers and officials
to buy property there.
To address the crisis, the federal government took on some public debt and drew upon used some
of the country’s purported $700 billion invested in “sovereign wealth funds” to inject into Dubai
banks to help them ride out the downturn. The largest such fund, called Mubadala, is owned and
run by Abu Dhabi. Among the cash injections, in late 2009, Abu Dhabi pledged about $10 billion
to help Dubai World (major real estate developer) avert outright default on about $26 billion in
debt repayment. As a result of its efforts to deal with the financial crisis, the overall public debt
level stands at over $230 billion, according to the IMF in May 2011. At the end of 2011,
economic analysts said that the UAE’s worst economic problems are behind it and its growth
improved substantially to about 3.3% for all of 2011, somewhat lower than the 3.9% expected.
Growth is expected to be only about 2.5% growth for 2012, in part because of the European debt
crisis, but levels probably still sufficient for the UAE to manage its debt obligations.29
Oil and Gas Sector/Dedication to Future Clean Energy
The source of the UAE’s sovereign wealth has been oil sales. Abu Dhabi has 80% of the
federation’s proven oil reserves of about 100 billion barrels, enough for over 100 years of exports
at the current production rate of about 2.5 million—2.7 million barrels per day (mbd). Of that,
over 2 mbd are exported, and the UAE may have as much as 500,000 bpd of spare capacity.30
Small amounts of its oil exports go to the United States. The UAE lacks non-associated natural
gas. It has entered into a deal (Dolphin project) with neighboring gas exporter Qatar and gas
importer Oman that is bringing natural gas, via a newly constructed pipeline, from Qatar to UAE,
and then on to Oman.
In addition, it is seeking to secure its oil export routes against any threat by Iran to close the
strategic Strait of Hormuz, through with the UAE and other major oil exporters transport their oil
exports. In mid-July 2012, the UAE loaded its first tanker of oil following completion of the Abu
Dhabi Crude Oil Pipeline (ADCOP) which terminates in the emirate of Fujairah, on the Gulf of
Oman. The line, estimated to cost $3 billion, has a capacity to transport 1.5 million barrels per
day of crude oil. The UAE is also planning a large refinery near that terminal, and possibly a
second oil pipeline exiting there, to further secure its oil exports and value-added petroleum
products.31
Seeking to reinvest its oil wealth, Abu Dhabi has sought in recent years to outdo Dubai by
building local branches of famous U.S. and European museums. However, it has also tried to use

28 Worth, Robert. “Laid Off Foreigners Flee as Dubai Spirals Down.” New York Times, February 12, 2008.
29 Economist Intelligence Unit. “Country Report: United Arab Emirates,” December 2011.
30 http://www.thenational.ae/events/areas/abu-dhabi/adnoc-preserves-spare-supplies.
31 “Abu Dhabi: In the Pipeline.” The Middle East, January 26, 2012.
Congressional Research Service
21

The United Arab Emirates (UAE): Issues for U.S. Policy

its oil wealth to plan for a time when the developed world is no longer reliant on oil imports. It
has funded “Masdar City”—a project, the first phase of which is to be completed in 2015, to build
a planned city which will rely only on renewable energy sources. Automobiles that run on fossil
fuels are banned from Masdar City. One feature of the city is a system of driverless taxis that use
automation to take passengers to their destinations. The civilian nuclear energy project discussed
above is also part of the effort to plan for a post-oil world economy.
U.S.-UAE Free Trade Agreement Negotiations
On November 15, 2004, the Administration notified Congress it had begun negotiating a free
trade agreement (FTA) with the UAE. Several rounds of talks were held prior to the June 2007
expiration of Administration “trade promotion authority,” but progress was been halting. The
UAE, which is considered wealthy, has received small amounts of U.S. assistance. The primary
purpose of the aid is to make the UAE eligible for advice and programming to improve its border
security and export controls, as shown below. In addition, as part of the GCC, the UAE is
negotiating with the United States a “GCC-U.S. Framework Agreement on Trade, Economic,
Investment, and Technical Cooperation,” an umbrella instrument for promoting ties between the
two sides in the economic area—essentially a GCC-wide trade and investment framework
agreement (TIFA). The negotiations are led by the U.S. Trade Representative, and an agreement
is expected to be signed before the end of June 2012.
Table 2. Recent U.S. Aid to UAE
FY2010

FY2007 FY2008 FY2009
FY2011 FY2012 FY2013
(est.)
(request)
NADR

(Nonproliferation,
Anti-Terrorism,
Demining, and
$
1,409.000
$725,000

Related)—
Counterterrorism
Programs (ATA)
NADR-
$172,000 $300,000 $200,000 $230,000 $230,000

Combating WMD
International

Military Education

$10,000

and Training
(IMET)
Totals
$1,581.000 $300,000 $925,000 $240,000 $230,000 0
0


Congressional Research Service
22

The United Arab Emirates (UAE): Issues for U.S. Policy

Author Contact Information

Kenneth Katzman

Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612

Congressional Research Service
23